Summary of RCT: Lectures and Readings

Rational Choice Theory Summary

1. Introduction to Rational Choice Theory

 Part 1
 Course structure
o 1. Introduction: history and a very brief intro to rational choice
o 2. Building blocks: preferences, utility, rationality
o 3. Group analysis: Condorcet paradox, cyclic majority
o 4. Arrow’s Impossibility Theorem
o 5. Spatial Modelling
o 6. Game theory: Nash, PD games
o 7. Collective action: Olsen, Ostrom, public goods
o 8. Application of RC in IR
 Connection to other courses
o Rational choice theory is not a separate field of political science, such as international
relations, comparative politics, political philosophy…
 Note: there is a discussion how many ‘core fields’ we have in Pol. Sci.
o It functions as a ‘lens’: you can approach issues and questions in these fields with the help of
rational choice
o Consequently, one finds a lot of overlap with other courses
 IR and RCT: Thomas Shelling, security dilemma, the decision to join armed groups or
to protest (or not)
 CP and RCT: Voting (rational or not), party politics, Hotelling’s model, vote
aggregation
 IPE an RCT: issues of collective action

 Part 2
 Where did it all start?
o Pol. Sci. at the end of WWII
 Thick descriptions
 Summary of how institutions worked & focus on their historical development
 For example, how does the parliament work, how does Congress work…
 Normative component: many judgements were made about how they worked
 Judgements were not scientifically proven
 Pol. Sci. was descriptive and judgmental rather than analytical (the “why” question)
o Pol. Sci. 1950s-1970s:
 Behaviouralism
 It emphasized an objective, quantified approach to explain and predict
political behaviour – the ‘why’ questions
 Started to systematically collect information and find empirical regularities (inductive
reasoning)
 Why do democracies rarely go to war against other democracies?
 Why do countries that have PR systems have generally more parties?
 At the same time: “economic imperialism”:
 Trying to apply economic methods to a variety of topics outside the traditional
purview of economics
 Immense impact on the discipline of pol. sci.
o The take-off growth (1970-1994):
 The combination of economic models and politics lead to RCT
 RCT began to attract many adherents
 RC concepts and techniques were applied to an ever-growing number of topics
 Many books and journal articles that used RCT were written and published in different
fields of pol. sci.
 Around 1990s: more than 40% of the articles published in APSR used RCT
 And now?
 Problems started:
 One important finding: rational choice scholars showed that state intervention
in the market was likely to fail
 This in contrast to many economist findings that were in favour for state
intervention to balance out market failure
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,  Many rational choice scholars were consequently used by neoliberal politicians
 Created a lot of hostilities between rational choice scholars and other political
scientists!
o Difficulties arise (1994-2004):
 Opposition to RCT grew significantly…
 Major problems came with the publications of Pathologies of Rational Choice Theory
by Donald Green and Ian Shapiro (1994)
 There main claim was that RCT has not yielded empirically useful results:
 “The discrepancy between the faith that practitioners place in rational choice
theory and its failure to deliver empirically warrants closer inspection of
rational choice theorizing as a scientific enterprise” (Green and Shapiro 1994:
6-7).
 Much of the uproar surrounding the book seems to have been motivated as much by
its confrontational tone as by its substance
 Reactions by rational choice scholars:
 M. Fiorina: “working in the vineyards of political science for 25 years, [and] the
bulk of that work is empirical. How could it have prospered otherwise?”
 K. Shepsle: “Don’t let go of something until you have something else to hold
on to.”
 At the theoretical level, it has neither led to a dismissal of rational choice approaches
in this discipline nor to a complete reorientation
 At the empirical level, the book has made rational choice scholars more attentive to
empirical evaluations of their theories
 Under the heading of “Empirical implications of theoretical models” (EITM)
o RCT in current scholarship:
 RC has not swallowed pol. sci. but it has not at all disappeared
 It still shapes the pol. sci. research agenda
 Especially in the US
 You can find application in comparative politics, international relations, …
 In the upcoming weeks, we will discuss ‘the classics’
 In the last session, we will discuss some more subtle applications of RCT

 Part 3
 Short introduction to RCT
o Has many different names: rational choice approach, formal political theory, rational choice
theory, positive political theory, and sometimes even political economy
o Some even argue that it is the methods of economics to the study of politics (Mueller 2003:
1)
o Deductive reasoning rather than inductive
 We start with a set of a priori assumptions
o We make general models based on these common assumptions
o These models we use to predict individual and group behaviour
 But is this realistic?
 What is the opinion of Green and Shapiro (1994) about these assumptions?
 Rational Choice models
o Models are based on these a priori assumptions
o These assumptions are very clear presented
o They are abstractions (or simplifications) of the
political world
 If the assumptions are true, what would
the political world look like?
o We test the implications of these rational choice models with real life information
 Making assumptions…
o So, unlike many other approaches, rational choice makes assumptions very clear from the
beginning!
 Applying RC models
o Two things can happen when we employ these RC models:
 1. We find evidence that supports our theory
 Our assumptions appear to be correct
 2. We find evidence that contradicts our theory

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,  At least one of our assumptions is wrong




We can often learn more about the world when rational choice theories and assumptions are
o
wrong, than we can when they are right!
 Assumptions
o RC are based upon a set of a priori assumptions
o Where do these assumptions come from?
 Anywhere!
 For example: we assume that politicians care about votes or that they care about
making society a better place, or even that they care about making their parents
happy by having a successful career in politics
 We can make many assumptions about political actors!
 This makes rational choice so versatile!
o However, there are some assumptions that all rational choice theories have in common:
 Methodological individualism
 Rational behaviour and utility maximization



2. Building Blocks of Rational Choice Theory. Part 1.
 Part 1: rationality and preferences
 Methodological Individualism
o One major assumption of rational choice is that of methodological individualism:
o The unit of analysis is the individual person
 What does this mean?
 Even group actions, such as protests, are explained by the actions of individuals
o This is contrast to theories that take the group as the unit of analysis
 Examples?
 Rationality / Irrationality
o Case of Saddam Hussein (former President of Iraq)
 He killed many people because he believed they were traitors
 Personally shot members of his cabinet
 Used gas to kill the Kurds living in Iraq
 Killed many family members and journalists
o Many people argue that he was “irrational”
o However, this term can have several connotations:
 “not the best way to get what you want”
 “crazy”
 “I would do something else”
 “Unpredictable”
 not “brilliant” or not “all-knowing”
o In RCT, rationality has only one meaning
o In the most basic sense, rational choice states that:
 Individuals has goals or desires
 Individuals act in accordance with those goals and desires
o Individuals wants (goals/desires), we call preferences
 We prefer to get a good grade for this course
 We prefer a warm shower in the morning
 We prefer to get a well-paid job
o Where do these preferences come from?
 Survival
 Reproduction
 Socially acquired
o RC does not care about where they come from and why people want certain things (no
judgment; at least not in terms of rationality)
 Preferences
o What individuals want and desire (preferences) are given

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, o This does not change much (in the short run)
o It does not really matter where these preferences come from
o We do not know the preferences of others; we only know our own preferences.
 However, we make assumptions about the preferences of others!
 Self-interested vs selfish
o If an individual has preferences and act in accordance to these preferences, we call the
individual rational and self-interested
 Note: rationality is directly related to the individual’s action!
o People pursue what they find important i.e. they pursue their preferences
o Preferences can of course include empathy for family and friends, animals, environment, ...
o Self-interest does not automatically mean selfish!
 You brush your teeth. It is certainly in your self-interest to do so (and your friends and
family thank you, too). But is brushing your teeth a selfish act?
 Thick vs thin
o Thus far we have said that individuals are rational if they have goals and act in accordance
to these goals
o But it gets a bit more complicated (of course):
o Thin version of rationality: we do not make any assumptions about an individual’s goal. We
only know s/he has goals
o Thick version of rationality: we make more explicit assumptions about the goals of
individuals
 Examples?
 The goal of political parties is to get into government
 The goal of politicians is to receive as many votes as possible
o Certain theories use the thin version, while other rational choice theories use the think
version
 More formally
o i is the term that denotes the individual
o x, y, z denotes the preferences that an individual i has
 For instance: x = fish, y = meat, and z = vegetarian
 For instance: x = Peter, y = Paul, and z = Pablo
 For instance: x = France, y = Greece, and z = Zanzibar
 For instance: x = Maria, y = Mary, and z = Magda
o x Pi y means individual i prefers option x to y
 Option x is better than y
 P means > (greater than / preferred)
o x Ii y means individual i is indifferent between option x and y
 Option x is not preferred above y
 Option y is not preferred above x
 I means = (equal to)
 Examples
o x Pi y Pi z
 Individual i prefers option x over y and y over z
 x = Peter, y = Paul, and z = Pablo
 Individual i prefers to date Peter over Paul, and Paul over Pablo
o x Ii y Ii z
 Individual i is indifferent between the options x and y and between y and z
 x = France, y = Greece, and z = Zanzibar
 Individual i just wants to go on vacation and does not care where to
o x Pi y Ii z
 Individual i prefers option x over y but is indifferent between the options y and z
 Rationality in more formal terms
o An individual i is rational if s/he makes a choice between the outcomes that is in accord to
his or her preferences
 He or she chooses the outcome that is most preferred
o A choice is rational if the object chosen is better as any other available objects according to
the chooser's preferences
 x Pi y Pi z
o A choice is rational if the object chosen is as good as any other available objects according
to the chooser's preferences
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